Apply ADX/DMI Indicator

The ADX/DMI is represented by three lines +DM, -DM and ADX.

The Directional movement

If today's High is higher than yesterday's High then: +DM = today's High - yesterday's High

If today's Low is lower than yesterday's Low then:-DM = yesterday's Low - today's Low

If +DM is greater than -DM then:-DM = 0

If +DM is less than -DM then:+DM = 0

The true range

True range is the largest of:

• |today's High - today's Low|

• |today's High - yesterday's Close|

• |yesterday's Close - today's Low|

Moving average of +DM, -DM and True Range

• +DMMA = exponential moving average of +DM

• -DMMA = exponential moving average of -DM

• TRMA = exponential moving average of True Range

The Directional Indicators

• +DI = +DMMA / TRMA

• -DI = -DMMA / TRMA

Directional Index

• DX = |(+DI - (-DI))| / (+DI + (-DI))

The Average Directional Movement Index

• ADX = the exponential moving average of DX

• ADX = SUM[(+DI-(-DI))/(+DI+(-DI)), N]/N

Where:

N — the number of periods used in the calculation.

To apply an ADX/DMI Indicator

1. Create a realtime interactive chart.

2. On the Charts menu select Add Study.

3. From the list of study indicators, select ADX/DMI.

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